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You are right that they are in rebuilding phase which is tough for team with such high expectations. Xabi Alonso has to win games and he builds team because if they start losing he could quickly be fired. You are also right that real test will be how they perform against big rivals like Barcelona and Atletico Madrid as those matches will truly show how much team has improved. For now they are doing well enough to give them time they need to get better.
At the moment he's trying to prove that by trying to do his best in every game and the development of the attacking scheme and the chemistry of the players has been good for Xabi.
He knows what the risks are in Madrid in terms of expectations and so far at least for the first two weeks it's been very good. But it's undeniable that for now he still has to pay attention to the conditions because after all, the slightest mistake can be bad for him and Madrid.
Hopefully, the mentality he has is really able to bring Madrid's young players to the results they deserve this season.
The season has only just begun and we are still left with a lot of drama that is sure to happen so Xabi must not be shaken by the many discordant notes directed at him.